Minnesota might rank 3rd overall, but on economic policy it ‘could do better’
Yesterday, I wrote about U.S. News & World Report ranking Minnesota the 3rd best state in America. But it is always worth checking how these rankings are generated.
Minnesota’s economy doesn’t get top marks
One of the categories the states were judged on was Economy. Here, Minnesota ranked a fairly average 18th. This was, in turn, derived from rankings for Business Environment, Employment, and Growth.
As U.S. News explains, Business Environment “gauges a state’s business environment based on monthly birth rate for new businesses and the rate of patents for new inventions”. Here, we rank the same average 18th. Within this, we rank 39th for Entrepreneurship, 4th for Patent Creation, 44th for Low Tax Burden, 7th for Top Company Headquarters, and 11th for Venture Capital.
Employment “tracks the three-year average for job growth, unemployment rates and labor force participation rates”. On this measure, we rank an impressive 3rd. Within this, we rank an average 25th for Job Growth, but a more impressive 4th for Labor Force Participation and 9th for Low Unemployment Rate. But we do have a very hardworking population here.
Finally, Growth “measures the growth of the young population in the state, overall growth through migration and the GDP growth rate”. Here, we rank a pretty unimpressive 29th. Within this, we rank 22nd for GDP Growth, 40th for Growth of Young Population, and 19th for Net Migration.
One other economic category is Fiscal Stability. We rank 25th on this. This ranking is taken from rankings for Long-Term Fiscal Stability and Short-Term Fiscal Stability.
Long-Term Fiscal Stability “measures government credit ratings and pension fund liability for states”, and here we rank 30th nationally. On this, Minnesota ranks 15th for Government Credit Rating Score and 33rd for Pension Fund Liability.
Short-Term Fiscal Stability looks at “states’ budget balancing and liquidity”. On this measure, we rank 19th. Within this, Minnesota ranks 14th for Budget Balancing and 17th on Liquidity.
Minnesota’s economy is unimpressive
There are great things about Minnesota which make it a wonderful place to live. But its economy is not, perhaps, foremost among them. Little of this, of course, will come as news to those who read our recent report, The State of Minnesota’s Economy: 2018.
John Phelan is an economist at the Center of the American Experiment.